Retail will be one of the trend areas and we will see more digital interactive solutions in Retail in the next year. IPG Emerging Media Labs identifies five trend areas to watch next year related to browsers, conversation, transmission, retail and consumer tech.

Even in the depths of a recession, interactive retail solutions will soar in 2009, IPG says. An online experience punctuated by smart signs, interactive mirrors, loyalty programs and other features is enhancing the consumers' and brands' ability to constantly be connected to the Web and each other by mobile phone. Google's mobile bar code reader Zxing enables photography and decoding of barcodes for more product data, and SnapNow provides price comparisons and peer ratings from Amazon.com.

Such real-time shopping assistance is matched by audience measurement on sight in stores to provide more relevant target advertising that more likely results in a purchase.

Check this cool slide deck on what the future could be like for Retail.

JC Penney seems to have hit run with a very viral marketing campaign titled, Beware of the Doghouse. The campaign allows women to put their their significant other in the "Doghouse" for bad gift choices this holiday season. This new site and the marketing campaign behind it provide a fun, interactive way for women to encourage the men they love to get out of the “Doghouse,” by purchasing affordable diamond gifts from The Jewelry Store inside JCPenney. Not just that the campaign makes use of Facebook Connect application, which allows Facebook users to easily log into their account and select potential “Doghouse” candidates from their Facebook Friends list. The application also allows photo downloads from the profile pages and feeds stories from the site to the candidate’s Facebook Wall. The website and video has spread like wildfire over the web this past few weeks.

This is a great example of how Retailers are using Social Media and innovative marketing to connect with customers and generate sales.

eMarketer Article on how Google focuses on driving sales offline instead of online for Retailers.

“If you look at any retailer, maybe 92% of the revenue is coming from the brick-and-mortar channel, so the most important platform to make successful is driving people to a store,” Mr. McAteer said. “A small percentage of retailers’ spending is online, and the majority of their advertising dollars are still being spent offline.”

“Within 12 months, you’re going see a lot of retailers talking about how they are measuring in-store success from their online marketing, and it will open up a whole other way of looking at ROI from your dot-com spend,” Mr. McAteer said. “As smart retailers start to figure it out, they will probably shift more of their marketing dollars online.”

It’s not surprising for Google to suggest that online ad and marketing spending will increase, but marketers themselves tend to value online tactics highly.

We hear your concerns," said Chairman and Chief Executive Michael Jeffries in an earnings call with analysts last month, but "promotions are a short-term solution with dreadful long-term effects." Marking down clothes now could lead to the brand being seen as something cheap, he explained.

Even in good times, Abercrombie has always shied away from big promotions, though it does try to clear out merchandise at the end of a season. The company's determination to keep prices high as the economy sours has already cost it dearly during the holiday season, which accounts for an estimated 30% of total teen retail sales.

Shopping is an inherently social activity. Why, for instance, do people go to the mall? To buy things, of course. But also to walk around, meet friends, people-watch and socialize. By contrast, shopping on the Internet has been a lonely and solitary experience, which may explain why the average e-commerce site has a paltry 3-percent conversion rate. That means 97 percent of people who go to an online retailer in search of a product never buy what they're looking for. However, for some retailers, social media is proving to be a valuable tool for engaging consumers, driving sales and building customer loyalty like never before. By adding social media content and capabilities to their sites -- including ratings, reviews, recommendations, blogs, photo galleries and forums -- retailers are transforming their Web properties into online destinations with vibrant communities.

The single most important challenge facing companies today is finding a path towards greater value creation. Historically, value resided in the products themselves. Manufacturers developed and marketed products, and there was little focus on services or high-end customer solutions. Today, a large component of value has migrated from the product itself to how the product is moved through to the consumer.

With a challenging economy and increasing supply costs, there is a reemerging interest by Walmart and other retailers to find ways to leverage the value chain to put even more distance between themselves and less efficient competitors. How companies are structured to extract profit from the value chain is becoming more important and is leading to a renewed interest in cost-to-serve and Service Pricing programs.

Personal shopping devices for consumers are reaching their “tipping point”. With Stop & Shop, a strong regional supermarket chain, signaling success with an initial test of its personal shopping device, experts say 2009 could be the beginning of the handheld era for grocery, warehouse clubs and pharmacies. Stop & Shop recently added to its new logo, color palette and employee uniforms, a handheld device, called Easyshop, which allows shoppers to scan, track and bag their groceries while they shop. The goal is larger basket size for grocery retailers, higher purchase goals for time-pressed shoppers, more total trips to the store, and higher coupon redemption rates. While the universe for consumer-facing handhelds for retail is still small, employee facing handhelds and consumer facing devices are ranked number two and three on the list of opportunities for improving the in-store experience.

As shoppers cut back on all but the most vital purchases in the economic downturn, some retailers have beat the odds and have discovered the winning formula for success. Ten retailers including BJ's, Walgreens and Hot Topic continue to post higher than expected financial results, announce store expansion plans and remain poised for future success as we enter 2009. RIS News highlights 10 surprisingly successful retailers that are surviving and thriving in one of the toughest economic climate in years.

NYTimes.com has a story on how Retailers are unaware of Mobile Barcode Scanning Apps which provide instant price comparison and allow users to save money.

These apps allow consumers to compare the prices of merchandise on a store's shelf to competing stores in the area just by taking pictures with their smartphone's camera. The prices are instantly retrieved and displayed on the mobile phone so consumers can know before they buy if they're getting a good deal.

I have written about similar app for iPhone in the past. It is a great way to save money in these difficult times. If you are a retailer what would you do, encourage consumers using such application or deny them a chance to save money?

National Retail Federation: According its 2008 Black Friday Weekend survey, conducted by BIGresearch and published on Sunday, the NRF said more than 172 million shoppers visited stores and websites over Black Friday weekend (which includes Thursday, Friday, Saturday and projections for Sunday), up from 147 million shoppers last year. Shoppers spent an average of $372.57 this weekend, up 7.2 percent over last year’s $347.55. Total spending reached an estimated $41.0 billion, up from $34.6 billion a year ago.

ShopperTrak RCT’s National Retail Sales Estimate found sales on Black Friday and Saturday rose 1.9 percent from 2007 – with each day posting total sales of $10.6 billion and $6.0 billion, respectively. It said Saturday sales fell 0.8 percent compared with last year as most Black Friday promotions ended. Sales on Saturday last year rose 5.4 percent over 2006, with $6.1 billion spent that day.

On Monday, SpendingPulse, a data service provided by MasterCard Advisors, said sales at U.S. specialty apparel retailers rose 1.6 percent on Friday and Saturday from a year earlier, but sales at electronics specialty retailers fell 14.3 percent. Luxury retailers saw a 2.4 percent increase, while e-commerce sales rose 11.8 percent, it said.

The willingness of people to walk over another human being to get at the right price tag raises the question of how they got that way in the first place. But in the search for the usual suspects and parceling of blame, the news media should include themselves.

Just a few days ago, the same newspaper writers and television anchors who are now wearily shaking their heads at the collective bankruptcy of our mass consumer culture were cheering all of it on.

…

Media and retail outfits are economic peas in a pod. Part of the reason that the Thanksgiving newspaper and local morning television show are stuffed with soft features about shopping frenzies is that they are stuffed in return with ads from retailers.

“Media outlets have been stride for stride with the retailers,” said Marshal Cohen, chief retail analyst for the NPD Group, a market research firm. Speaking on the phone on Friday evening after nearly 24 hours of working the malls, he suggested, “Something like this was bound to happen at some point. The man who died at Wal-Mart was, from what I understand, a temporary employee and had no idea what he was dealing with.”

What do you think of this? Are Retailers to blame for this debacle or Media for driving the madness.

I have moved RSS feed for this blog to a new address on FeedBurner. This feed URL is easy to understand than the previous one. Request all to update your RSS feed readers for our new Feed URL given below.

Retailers are adopting new strategies in targeting its loyal customers (WSJ, Registration reqd) by using Analytics and advertising promotions on an individual basis. This is a shift from earlier times when Retailers would send similar email promotion to all. Retailers like Sears, Gap, Target are using analytics to tap their most profitable customers and shying away from TV commercials

It's an adage of the business: Persuading a satisfied customer to return is cheaper than attracting a new one. Now, in the struggle to do more with less, that concept is becoming even more important.

Acquiring a new customer costs about five to seven times as much as maintaining a profitable relationship with an existing customer, says Marc Fleishhacker, managing director at WPP's Ogilvy Consulting, which designed the campaign for Sears.

…

Sears and Ogilvy have developed a system to identify the categories of merchandise Sears customers have purchased in the past and to measure the chance that they will buy those sorts of items again this season. That helps Sears determine the type of emails and point-of-sale offers to aim at individual customers.

When customers buy an item online, Sears confirms the purchase with an email including a promotion tied to that product. A person who buys a new appliance at Sears.com might get an email offering a deal on the store's extended-warranty program.

Online retailers plan to offer more deals and promotions to spur holiday shopping on the Monday after Thanksgiving this year, according to a new study.

The survey, commissioned by Shop.org, a division of the National Retail Federation, says 83.7% of retailers will have special promotions on that day, known unofficially as "Cyber Monday," up from 72.2% a year ago. Of those promotions, one-off deals, email campaigns and one-day sales are expected to be popular.

Circuit City Stores Inc, the No. 2 U.S. consumer electronics retailer, filed for bankruptcy protection on Monday just a few weeks before the start of the key holiday shopping season, becoming the largest retailer to file under Chapter 11 this year.

Circuit City fell victim to tighter credit terms from vendors and a loss of market share to Best Buy Co, Wal-Mart Stores Inc and other rivals.

…

In a court filing on Monday, Chief Financial Officer Bruce Besanko said the retailer filed for Chapter 11 in order to continue its turnaround efforts.

"In large part, a Chapter 11 filing is due to three factors, all of which contributed to a liquidity crisis that prevented the company from completing its turnaround goals outside of formal proceedings: erosion of vendor confidence, decreased liquidity and a global economic crisis," Besanko said.

Service Oriented Architecture (SOA) allows you to leverage existing assets and manage the diversity and complexity within the Retailer’s organization. Using SOA, Retailers are building complex systems which can handle changes with minimal changes. Supermarket News is reporting on how in Texas, Retailers are using SOA to account for the tax break on school-related purchases which is an annual activity. The use of Services is making life easier by limiting changes. While the adoption of SOA has been slow in retail but over the last two years the speed of adoption has picked up. The Association of Retail Technology Standards (ARTS) is also supporting the SOA adoption by providing SOA Blueprint for Retail which provides step-by-step guide and best practices in attaching SOA.

SOA is an IT framework that a growing number of retailers — 56% of respondents in an ARTS survey — are beginning to explore, and that some regard as a potentially game-changing approach to the retail business.

“There's a higher SOA penetration in retail today than 24 months ago,” said Richard Mader, executive director of ARTS (the Association of Retail Technology Standards), a division of the National Retail Federation, Washington.

The importance of SOA is reflected in the attention it is being given by ARTS, which counts among its members such major food retailers as Kroger, Safeway and Publix. In January, ARTS unveiled an SOA Blueprint for Retail, the result of a project, co-chaired by Dorf, to give ARTS members a free step-by-step guide to adopting SOA, along with vendor-neutral best practices. (The Blueprint is available to non-members for $249.) ARTS has also made available — in some cases just to ARTS members, in other cases to anyone — some downloadable building blocks of SOA technology.

Amazon.com has launched Windowshop.com which enhances the shopper’s experience. The site provides a unique view by encouraging users to use the arrow keys on the keyboard to navigate the site. Shoppers can scroll through the items and zoom in which plays either video or audio related to the product. I found the site very appealing and fast and easy to use.

The remarkable slowdown hit luxury chains that sell $5,000 designer dresses as badly as stores that offer $18 packs of underwear, suggesting that consumers at all income levels are snapping their wallets shut.

Sales at Neiman Marcus, the luxury department store, dropped nearly 28 percent in October compared with the same month last year. Sales fell 20 percent at Abercrombie & Fitch, nearly 17 percent at Saks, 16 percent at Gap and nearly that much at Nordstrom.

Of the more than two dozen major retailers that reported on Thursday, most had sales declines at stores open at least a year, the majority of the decreases in double digits. Deep discounters like Wal-Mart and BJ’s Wholesale Club reported gains.

Why should the customer go into a retail outlet and spend his hard earned money? Have our retail czars pondered over this problem? If the customer wants an air-conditioned environment then he can buy an air-conditioner and fix it at his house. Does he want all he would like to buy at one place? Is that the value of a shopping mall or large retail outlet? Well, for one thing, the builder of a mall or a retail outlet company can never guarantee that he will stock all the brands with him or even all the relevant brands with him. After leasing the building, it is the relationships that the mall or the retail outlet develops with various brands that determine the outcome of the outlet.

The Online retail sales grew only 6% in the third quarter, the slowest growth on record for online sales, this according to a report from comScore Inc. Total U.S. online retail sales (excluding travel) were approximately $30 billion in Q3.

comScore, Inc. (Nasdaq: SCOR), a leader in measuring the digital world, today released its Q3 2008 retail e-commerce report, which showed that online spending grew 6 percent in Q3 2008 versus the same period last year, a slowdown compared to the year-over-year growth rates of 12 percent in Q1 and 13 percent in Q2 2008. Total U.S. online retail sales (excluding travel) were approximately $30 billion in Q3.

The Video Games, Consoles and Accessories remained the high – performer in line with the previous quarter.

As in the prior quarter, Video Games, Consoles & Accessories remains one of a handful of high-performing online retail categories, rising 60 percent in Q3 2008 versus the same quarter year ago. Furniture, Appliances & Equipment (up 52 percent) was another top performer, along with the Sport & Fitness category (up 40 percent). Categories that have not performed as well as last year include Apparel & Accessories (down 2 percent), Toys & Hobbies (down 3 percent), Jewelry & Watches (down 11 percent), and Music, Movies & Videos (down 29 percent).

Sales related to online supermarket shopping have outstripped electronic and gadget-related online sales for the first time since internet retailing began, according to statistics from MyVoucherCodes, the UK's largest free to use discount and voucher code website.

"Sales statistics from MyVoucherCodes have revealed that more people are now looking to find bargains on their essential items such as bread and milk and are being attracted to the online supermarket sites because of the exclusive offers and discounts on home delivery as well as shopping," says the company.

"The Top Four current online shopping sectors are; online grocery shopping with 31% of sales; 25% of sales for electronic items such as computers, TVs and gadgets; 21% of sales attributed to clothing and fashion items and 15% of sales related to holidays."

4,238 people from across the UK took part in the research which also revealed that:

Tesco leads the way when it comes to the most popular online supermarket website with 44.2% of people saying they shopped there

Asda had a 23.2% share, followed by Sainsbury's with 11.7% of market share. The rest of sales were spread between brands such as Waitrose, Ocado and Iceland.

The average amount spent on online groceries was £53 per week.

The north west is the region that uses online supermarkets the most, followed by the south east, London, south west and the north east.

As Wall Street unravels and the economy confronts its crucial holiday spending season, consumers cannot be expected to prop up retailers as they have in past downturns. Even luxury stores, whose customers have been immune in recent years to retail price sticker shock, are expected to take a hit this time, according to Wharton faculty and consumer analysts.

Sam’s Club here said yesterday it plans to hold in-store events over the next two weekends to sign up families and businesses for $10 memberships good for 10 weeks — the first time it has offered short-term memberships. According to Mike Turner, vice president, membership, for Sam’s, “We know we can easily demonstrate the value at Sam’s Club in just one shopping trip. With a temporary 10-week membership, we’ll be able to give those who sign up a good chance to see what we can do for them everyday and through the holidays.” Sam’s is promoting the weekend sign-ups with a national radio campaign plus print ads that feature 10 reasons for joining, including U.S.D.A. Choice meats; $4 generics; low-cost trim-a-tree merchandise; and low-priced holiday photo cards.

IDTechEx, the leading independent research and consulting firm specializing in RFID technology is reporting that RFID Industry has followed the Gartner Hype Cycle. While the growth has reduced, it will still forecasts 23% growth in 2009 over 2008 and by 25% growth in 2010 over 2009.

These applications will eventually prevail, but probably not fast enough to create a profitable business for tag makers in the short term. For example, IDTechEx has recently surveyed RFID chip makers, and we find that in 2008 approximately 1 billion UHF chips will be made. The largest single order is by Marks & Spencer for 150 million tags for apparel, but the number two behind that is much less. Indeed, it is still rare to hear of orders of more than 1 million UHF tags - in other words, the applications of UHF RFID are many and small, reaching a wide range of different markets. Almost all are closed loop applications.

Nearly half of US online adults (45%) plan to spend less money on gifts this holiday season than last because of the state of the economy, and one in five plan to spend significantly less, according to a Harris Interactive survey commissioned by RetailMeNot.com.

Fully 89% of online adults think coupons are a great way to save money, and about a third (35%) of those who will be spending less money on gifts this holiday season will use coupons, the study found.

A new survey finds that shoplifters and dishonest employees stole more than $6.7 billion in property from just 24 major retailers last year.

The 20th annual retail theft survey found 24 retailers, with more than 19,000 stores, apprehended a record 708,962 shoplifters and dishonest employees in 2007 and recovered more than $150 million in stolen property.

One in every 28.2 employees was caught stealing from their employer last year, based on over 2.3 million employees.

New in-store digital ads are using the latest technology to target messages to individual buyers, boosting sales and even helping to manage inventory.

When you order a morning coffee at a café owned by Israel-based Aroma Espresso Bars, an image of a croissant may suddenly appear on a digital display next to the cash register. Stop by for a sandwich or salad later in the day, and the display could flash a picture of a suggested beverage.

Aroma Espresso says sales of desserts and drinks featured on the screens have increased as much as 68% in outlets where it has installed the display systems, starting about a year ago. The company has about 100 cafés in Israel, the U.S., Canada, and Romania. Besides boosting sales, the system aids inventory control—for example, by encouraging customers to buy Danish sweet rolls when muffins are running low.

Welcome to the future of point-of-sale retailing. In-store digital ad displays have been around for a few years already. But stores and restaurants are now starting to use the technology for real-time promotions, instantly tailoring their sales pitches to match individual customers' selections or variations in product availability.

US retail giant Wal-Mart's new ethical gold initiative has been hailed by green campaigners. Customers can track down the mine where the gold for their Wal-Mart Love Earth jewelry was sourced by entering a product code online, according to website Ethical Corporation. They can also discover where their bracelets, rings and earrings were refined, polished and set, the site added. It is hoped that the measure will reassure customers about the credibility of the chain's environmental standards. Wal-Mart aims to have ten per cent of all its jewelry traceable in this manner by 2010 and wants all of its mines and manufacturers to meet sustainability criteria, the news provider noted. Ethical gold has become a popular choice for couples having environmentally-friendly weddings, according to the Press and Journal.

If you want to trace the gold in your piece of jewelry purchased at Wal-Mart, head out here: www.loveearthinfo.com.

Recently I had blogged about what happens when technology and culture collide. The article pointed out in the blog talked about a new Workforce Management System (WFMS) deployed by Ann Taylor and how it is reducing the opportunities for store associates with less success by giving them fewer and less desirable hours while giving the busiest and most desirable hours to associates with higher sales numbers.

Now an article from Knowledge@Wharton, criticizes the Ann Taylor WFMS by comparing it with “squeezing blood out of a turnip” and by describing the initiative as "a case of something that has its roots in a good idea [but that has been] taken too far."

Wharton marketing professor Stephen J. Hoch says the Ann Taylor system is like "squeezing blood out of a turnip" and goes a long way toward alienating employees. Erin Armendinger, managing director of Wharton's Jay H. Baker Retailing Initiative, describes the initiative as "a case of something that has its roots in a good idea [but that has been] taken too far."

'The Worst of Dilbert'

While the softening economy may give employers a stronger hand in employee relations, retailers historically have difficulty attracting and retaining qualified workers because the industry pay scale is so low, Hoch points out. "Ann Taylor, and the retail environment in general, is not the only place where people can work. This system potentially creates a hostile working environment. It's the embodiment of the worst of Dilbert."

Hoch acknowledges that Ann Taylor's new scheduling system may be one way to reduce labor costs. "It can be self-fulfilling. If you give people just a few [off-peak] hours, they will look for another job. Maybe that's what [corporate executives] want." He also acknowledges that technology-based information can be valuable to managers, but only if the value is clearly understood throughout the company. Without consistent buy-in, technology-driven management tools will result in adversarial relationships across all staff levels.

Information technology is not a way to overcome weak management, he suggests, noting that human capital management systems must be sold to workers as a valuable tool for all employees and should be accompanied by training sessions. "It should motivate everybody, not just the best sellers. It would be nice to couple it with training to bootstrap people who are not as effective as the top performers."

The article goes on to state, unlike other retailers like Wal-Mart, Payless Shoesource etc who have also deployed WFMS that puts more workers on the floor at the busiest times, Ann Taylor has added the dimension of individual sales productivity to the equation. This additional dimension may backfire by a way of unhappy workers leading to a drop of sales.

Retailers who anger their staff risk major consequences, Armendinger notes. "To your customer, your store's people are your brand," she says. Those "in the corporate office sometimes forget that people on the front line mean more than any strategy you come up with at the corporate office. To treat them as if they are numbers is a little bit disturbing," especially given that employees have their own fixed costs, such as mortgages and car payments, as well as fixed responsibilities which don't always lend themselves to sharp fluctuations in schedules.

Armendinger suggests that rewarding employees with prime working hours based solely on sales numbers is not necessarily the way to generate better sales over time. The Ann Taylor approach is likely to encourage sales associates to put such a premium on sales that they overpower customers with high pressure techniques that will backfire.

"When customers feel a sales person is not genuine, they feel as if they are a piece of meat," she says. "Women do not want to go into a store and be viewed by salespeople as 'a dollar sign'. They want salespeople who will say, 'That color's not right. Here, this is better.' Now, if it takes an extra five minutes, the salesperson will just say, 'That looks great.'" The new scheduling system erodes the relationship between salesperson and client which is particularly valued by older women, the demographic that makes up much of Ann Taylor's customer base, according to Armendinger. "Why [would these customers] go into the store? They can just stay home and shop online."

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Successful technology-based management practices must be embedded in social relations, according to Yakubovich. Even sales agents working from their homes in far-flung locations wind up forming spontaneous virtual networks -- for example, going from company chat rooms to private conversations. These networks can work both toward and against the firm's goals, Yakubovich states.

Very good read. Every person touched with WFMS development or deployment needs to read this article on how

In the past, I have written how Retailers use the Social Media sites like Facebook, MySpace (1, 2, 3) for Marketing. A new report from eMarketer reinforces the same.

Consumers' use of social media is altering the way they make purchase decisions. To stay relevant, retailers must determine how to incorporate social media, such as social networks and blogs, into their marketing strategies.

Generation Y (those born after 1979) online buyers are more immersed in online and mobile activities than any other generation, according to 2008 research from shopping comparison site PriceGrabber. Some 85% of Gen Y respondents said they participated in social networking, and 57% reported involvement with blogs.

To reach this demographic segment, Web retailers are marketing to them on their own turf. Data from an August 2008 survey of Web merchants sponsored by Internet Retailer found that, of the 39.3% of retail respondents that use social networks, 32% have a page on Facebook, 27% on MySpace and 26% on YouTube.

Retailers have come a long way from the no frills aisle. Rather than marketing store brands as some lesser, cheaper alternative to brand name products, Wal-Mart, Walgreens, CVS and others are increasingly creating and promoting their own "captive brands." For example, the bioInfusion line of haircare products, available only at Walgreens, sits on the shelf alongside Procter & Gamble's Pantene. At CVS, Pantene has to contend with the Cristophe line. At Wal-Mart, it is up against Equate. Carrying no evidence of the store's affiliation, these brands, manufactured by a third party and sold exclusively at the chains (hence "captive"), let the retailer command a price similar to brands produced by consumer packaged goods companies like P&G. They also let the retailers gain ground in a category—beauty—for which consumers generally take a dim view of traditional private label brands

The success of the Captive Brands is seen mostly in beauty products.

One reason why the shift has affected beauty care more than other industries is because the category itself is "over-SKU-ed," said Mike Moriarty, partner at A.T. Kearney's consumer and retail practice division in Chicago. "If you look at the haircare aisle, it has way too much product in it anyway."

With attractive margins and the differentiation, there is every reason for retailers to promote their captive brands.

According to a new Mckinsey study, Organized retail in India which accounts for less than 5 per cent of the retail market today — will expand to anywhere between 14 and 18 per cent by the year 2015. There are some interesting data points in the report as shown below:

While surfing Retail News today, this article caught my eye, Abercrombie Chooses In-Store Scent Technology. I followed the article and came to know that In-store scent technology or advanced Air treatment is an industry by itself. Prolitec, which deployed the tech at Abercrombie has some nice examples of how Retail Stores are using the technology to enrich store experience.

Retailers utilize Prolitec’s Ambient Scenting service to create the desired olfactory environment for their customers in a manner that complements the many other ways – through sight and sound – that they offer shopping experiences. Prolitec can be used to enhance Point-of-Sale promotion of products such as fine fragrances, detergents, foods, leather goods and other items. In addition, Prolitec’s technology offers Odor Remediation and Restroom Hygiene in all public spaces that are subject to high traffic.

Prolitec’s use of Aromatherapy creates an ideal shopping environment and a more pleasing consumer experience.

Sears, Roebuck, looking to engage shoppers in new ways, is embracing a 3-D Web technology that will allow shoppers to try on clothes virtually from its Web site in an effort to replicate the in-store dressing room experience.

The retailer this week said it is partnering with IBM and My Virtual Model , a Montreal creator of virtual identity products, to revamp its Sears.com site so that consumers can search for clothing items by clicking on images and try on garments virtually.

From Sears.com, customers will be able to create an interactive model of themselves by giving info on weight, height and other features. They can then dress that model by clicking on blouses, pants and accessories. The technology enables buyers to mix and match outfits and change garment colors.

“We’re doing this to really drive an interactive experience with our customers,” said Rob Mills, vice president for Sears’ online business unit. “We’re trying to offer a lot of personalization.”

He said the virtual search function will be available on Sears.com in late October.

Sandy Carter, a vice president with IBM, said she expects this technology to eventually become the norm for online shopping.

“Today it’s being applied to apparel,” she said. “Tomorrow we see it being used with appliances and other types of merchandise.”

While Shop.Org had their Annual Summit in US, some of the top Indian Retailers & professionals gathered in Mumbai for India Retail Forum (IRF) from 16th to 18th Sept. A lot of good discussion, which you can read at the below URLs.

Retailing continues to gain momentum in India with the main focus being on growing customer experience and increasing retails footprints. A Springboard Research study on IT in India's retail sector confirms SAP's strong position in the Indian market, with 27% of study respondents identifying SAP as the leading primary influencer in terms of solutions investments.

"Technology is a high-priority investment area for most large and medium-sized Indian retailers, as they look to scale up their business operations in a competitive market," said Nilotpal Chakravarti, Senior Analyst - Vertical Markets at Springboard Research. "We have seen a strong momentum for investments in ERP and other back-office solutions and SAP has emerged as a leading player in this space," he concluded.

If like me, you have missed attending or following the Shop.org’s Annual Summit this week, don’t worry. The Shop.org Blog has blogged (providing a very good summary) all the events on a daily basis. There are tonne’s of information there including many sessions on retail technology. I liked the following:

So, The Electronics Retailer, Best Buy is buying Napster. The deal which looks good in Best Buy's favor is a good way to expand beyond just consumer electronics. This looks to be a positive step with future in mind and something that will differentiate Best Buy from it's competitors like Circuit City.

Such "workforce-management" systems are sweeping the industry as retailers fight to improve productivity and cut payroll costs. Limited Brands Inc., Gap Inc., Williams-Sonoma Inc. and GameStop Corp. have all installed them recently. Some employees aren't happy about the trend. They say the systems leave them with shorter shifts, make it difficult to schedule their lives, and unleash Darwinian forces on the sales floor that damage morale.

"There was a lot of animosity" toward the system, says Kelly Engle, who worked at an Ann Taylor store in Beavercreek, Ohio, until late last year. "Computers aren't very forgiving when it comes to an individual's life."

...

Vendors of the systems claim they can boost productivity by 15% or more, and can help cut labor costs by 5% or more. Wal-Mart Stores Inc. just completed a yearlong rollout of a computerized scheduling system for 1.3 million workers. It cited 12% labor-productivity gains as a key reason for improved results in its fiscal quarter ended Jan. 31.

"There's been a natural resistance to thinking about human beings as pieces in a puzzle rather than individuals," says John M. Gibbons, a senior research adviser at the Conference Board and a former director of human resources at Gap. "When you have those clear methods of measurement, and just-in-time delivery for supply-chain management, it's a natural transition to apply it to human resources as well."

Vendors call their industry human-capital management. It notched $7.2 billion in revenue last year, and is projected to grow at 12% a year over the next five years, according to Boston-based AMR Research, which advises companies on information technology. Major providers of business systems, including Oracle Corp. and SAP AG, are now in the business.

After years of building bigger stores — many larger than a football field and carrying 60,000 items — retailers are experimenting with radically smaller grocery stores that emphasize prepared meals, fresh produce and grab-and-go drinks.

The idea is to lure time-starved shoppers who want to pick up a few items or a fast meal without wandering long grocery aisles or paying restaurant prices.

Safeway has opened a smaller-format store in Southern California, and Jewel-Osco is building one in Chicago. Wal-Mart plans to open four “Marketside” stores in the Phoenix area this fall, and Whole Foods Market is considering opening smaller stores.

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The biggest push in such stores is coming from the British retailer Tesco, which made a splashy entry into the United States last fall, opening a 10,000-square-foot Fresh & Easy Neighborhood Market in Las Vegas.

Since then, Tesco has opened 72 stores in Nevada, Arizona and Southern California.

Netezza (NYSE Arca: NZ) today announced that Tesco has installed its market-leading data warehouse appliance to power market basket analysis and track stock wastage. The move from Teradata for this project was designed to improve the performance and class of technology in Tesco’s data centre, while driving down all associated costs.

Widely recognised as the world leader in understanding retail customer behaviour and loyalty programmes, Tesco has tracked different data warehousing vendors coming to maturity in the market, and is keen to keep pace with business change. Marcel Borlin, Programme Manager at Tesco explains, “We examined a number of vendors in great detail. We were looking to realise savings; not only on the purchase cost, but on the total cost of ownership too. The physical footprint and power and cooling requirements in the data centre were also important factors. The Netezza system needs literally a fraction of the space, power and cooling of our existing systems. We also needed better performance than our current Teradata platform can offer, and our Netezza system is performing very well on both queries and data loads; up to five times faster.”

Walmart is the first retailer in the US to rollout a next generation retail media network that is supported by a flexible, open enterprise platform powered by Internet Protocol Television (IPTV) -- technology that will allow the retailer to monitor and control more than 27,000 screens in more than 2700 stores across the country. The Walmart Smart Network will also deploy response measurement and message optimization technologies to enable delivery of the most relevant content to shoppers -- by store, by screen, by day and by time-of-day. All of the content on the Walmart Smart Network will be customized, designed to deliver helpful product information to consumers at the point of decision when and where they need it in the store.

Interesting metrics related to Retail Sales per Square Feet coming out of on news article (Retail biggies force to focus on destination malls) I read yesterday. In India, the modern neighborhood format stores are achieving sales per square feet around Rs16-20 per sq ft per day. And a number of Rs 35-40 (roughly $1) is considered viable to keep running the store.

The thruput (sales) for the modern neighborhood formats currently stands at Rs 16-Rs 20 per sq ft per day as against Rs 35-Rs 40 per sq ft per day, which industry experts reckon is the minimum required for viability. There is a huge mismatch between the rents paid and the actual sales that take place in the formats.

This comes to be roughly $360 for the year which is very much comparable to that of Retailers in United States, which considers $300 per square feet as a respectable number (as of 2005).

As of 2005 annual store sales in the range of $300 per square foot ($3,000/m²) is considered a respectable result in the United States as the national average for regional malls is $341 per square foot[1], but the target number depends on the location, the type of store and other factors.

Just to corroborate this, I searched for Reliance Retail's (One of India's top Retailers) Sales per square feet and found this article, Reliance Fresh and Small. According to this article, Reliance Retail could be having Sales per sq ft north of $300.

Sources say that Reliance believes each Reliance Fresh outlet could earn annual revenues of Rs 3 crore. That’s a sale per sq. ft of roughly Rs 12,500. Industry sources say this is in line with what other chains have achieved in the past. For instance, at its peak FoodWorld had managed a Rs 300-crore turnover on its 80 stores. The average size of a store was about 3,000 sq. ft — or sales of Rs 12,500 per sq. ft.

Came across a great hilarious site today, Not Always Right. From the About Page of the site:

If you’ve ever had the pleasure of working in retail, service or other public-facing jobs, you’ve inevitably come across that occasional customer that either makes your blood boil, tickles your funny bone or leaves you totally confused. We all need a place to vent, so Not Always Right is a collection of quotes from these particularly memorable customers.

We believe that while customers deserve to be treated right, so do the employees and the other folks that serve them. Not Always Right is about leveling the playing field for those of us who toil and sweat every day trying to juggle demanding customers and often unreasonable corporate expectations. At the end of the day, it’s about remembering that whether we’re a customer or an employee, we’re all human, foibles and all.

Check out the stories from people working in Retail here, http://notalwaysright.com/tag/retail. Highly recommended if you want a good laugh. More so if you are from Retail or Service Industry.

Retailer Kohl's Corp. this month launched a new line of apparel, but the plaid skirts and printed T-shirts won't be sold in its 957 stores. Instead, it's selling them on Stardoll.com, a virtual community for teens and tweens where kids can fork over "Stardollars" -- purchased online at a nominal sum -- to buy apparel for their online characters.

Just came across an Retail Magazine from Microsoft called Retaispeak. The magazine has some very good articles and provides a good view in what other retailers are up to when it comes to Retail Technology.

From restaurants to department stores, retailers face pressure to increase productivity, grow profits and justify every technology investment. Retailspeak, Microsoft’s customer publication for the retail industry, provides retail technology and business executives with a digest of the key challenges in the industry, and the technology solutions that can address them. Featured topics range from store systems and managing the supply chain through to business intelligence and enterprise collaboration. Retailspeak also provides a round-up of industry news, case studies, commentary, interviews and analysis. In addition to our team of in-house journalists, experts from all areas of the industry provide their insight on the retail industry. The magazine is published every quarter. Subscribe to Retailspeak to start receiving the definitive word on retail technology.

Who won't go to a store which has such Mobile Point of Sale (MPOS) gadget.

The Motorola Sparrow was conceived to provide retail stores with a mobile point of sale device to solve increased service demands from consumers while decentralizing the check out point, i.e. pay for it and get out as fast as you can. It combines a scanner, point of sale (POS) system, RFID, communication and credit card reading capabilities into one mobile device.

There are a few devices that offer MPOS (mobile point of sale) in the marketplace but none are consumer facing nor appropriate for front-end retail environments. Existing products are often rugged and obtrusive. If you’ve ever been to an Apple store, you know what I’m talking about. They often take away from the environment and make the entire retail experience unpleasant.

Both the front and back of the Sparrow are equipped with touch sensitive areas, supposedly making it easier to navigate and use. The entire unit can hang from a lanyard.

This isn’t a new idea but definitely a huge improvement. Many high-tech electronic stores now equip their employees with mobile point of sale devices but design studio Aruliden definitely has an eye for form and function. I’d love to see it integrated into retail environments.

Industry observers believe that the company has expanded very fast and has managed to set up over 600 stores across various retail formats in less than two years, but its supply chain is in a mess. “How to get the right merchandise to the stores on time has been its biggest problem. You’d often not find the goods you want in Reliance’s food and grocery outlets,” said a source.

...

True to its form, Reliance built scale fairly rapidly, spreading from one city to another. The growth was achieved through a team of professionals poached from existing Indian retailers, but the pace of execution dwarfed rivals’ achievements. Reliance, however, realised it needed to do a lot more on the back-end to continue the pace of expansion and return early profits, which its shareholders usually expect. “It didn’t take Reliance long to realise that retail was a different ballgame altogether. It’s not just about some long-term government policy or certain business competency, which it’s known to manage well. The variables in retail business are far too many. There could be a number of factors such as general economic downturn, terror scare, shorter wedding season, cricket season like an IPL or a political protest, which can affect store sales. You need to be able to manage that,” said a source close to Reliance.

With Wincanton, Reliance wants to fix the problem.

Wincanton, the UK-based $4-billion supply chain solution provider, has been roped in precisely to tackle this problem. It is expected to completely take over the supply chain, find the right warehouses for goods and transport them in time and in the right quantity to Reliance Retail stores. Supply chain solution providers, Wincanton, for example, have IT systems in place to update them with regular data on inventory level in stores. So, even without a store manager calling up, the warehouse manager would know the stores’ requirements. Wincanton serves several companies across industries, from FMCG to retail, automotive and oil. Its client list includes retail giants Tesco and Woolworths, auto companies Ford and DaimlerChrysler, and consumer goods firms P&G, Nestle, SAB Miller and GSK.

More and more we are seeing that Indian retail companies are not hesitating to go for alliances to bring the best of retail technology and processes to manage the operations.

Indian retail real estate prices are softening and availability is rising as high interest rates crimp access to funds, slowing demand and forcing builders to sell, a senior Reliance Retail official said on Tuesday.

Retail firms are scaling back their expansion plans, and builders who had planned to hold on to properties, are selling space to tide over the cash crunch, Bijou Kurien, chief executive of Reliance Retail's Lifestyle unit, told Reuters.

Aberdeen data reveals that the top business pressure impacting loyalty-related decisions of 58% of Best-in-Class companies in retail is the need to develop lifetime customer value, which is defined as the present value of future cash flows through long-term customer relationships. “In times of stagnant growth, retailers need to develop lifetime customer value through improved customer retention, re-activation, and acquisition strategies. This will improve long-term stakeholder value and ensure an assured revenue stream for the retailer through customers who are expected to spend for several years,” says Sahir Anand, senior analyst and chief author of the customer loyalty benchmark report. Aberdeen data reveals that 93% of retailers execute loyalty programs as a standard offering for their web, store, or catalog channel customers. Such campaigns include, but are not limited to, point perks, rewards, coalition marketing, frequent buyer offers, or private label credit cards. The reports also indicated that lifetime customer value in retail is being overshadowed by the tactical nature of loyalty campaigns that target short-term demand. “Loyalty campaigns are executed without due consideration to ideal customer segments, tools, coordinated cross-channel marketing needs, and long-term customer relationships,” says Anand. The measurement of ROI on customer loyalty programs is a continuous action at retail headquarters. Moreover, determining such an ROI is a much simpler process compared to other retail solutions such as POS, merchandising or pricing. There are substantial and recurring cost factors associated with loyalty in retail. Survey results show that cost-benefit issues surrounding loyalty scenarios are top-of-mind for retail marketers. Repeat visit (61%), incremental sales (58%), and overall satisfaction (57%) have emerged as the three most significant factors used by retailers for justifying spend on loyalty elements, operational costs, and upgrade / deployment of loyalty software applications. All three ROI criteria can lead to sales uplift, retention improvement, and reduced attrition for retailers.

Mobile technology will change the way Retailers interact with their customers, the way customers shop and the way they have options to move on if Retailers are not spot on. Check this iPhone application, called Checkout SmartShop - a shopping assistant meant to help you find online and local prices when you’re out and about shopping.

The App lets you enter barcode on your iPhone (better would be scanning or taking pictures) and find out the price and availability of the product elsewhere, online and other stores. you get to see the user reviews and store locations also with the app.

A very well written blog post on the relationship based on trust between Retailer and Vendors when it comes to shipping displays, running promotions and packaging.

Why would I stop a vendor from shipping displays, running promotions and changing packaging? Because I don’t trust that they know what they’re doing. I’ve seen too many hastily designed displays, too many promotions that build up like expired plaque on my planogram, and too much packaging that shows how little they understand the value of real estate. From here, it’s a short leap to understand why I’d ask for “just hand me the check book” entitlement programs. Entitlements are insurance policies against vendor marketing failures. Pay me up-front. I expect you to fail.

All this makes sense until a brand shows me that they understand what I do for a living and then proves it. Show me quantitative packaging and promotion research measured against your end users who shop in my stores. Show me how you’ll forecast it, ship it, sell it through, and then clean it up after it’s done. If you can do this, I’ll test anything you want because I’ll believe that you know what you’re doing and you won’t make a complete mess of the one thing I have that you don’t – my stores.

The ranks of obsessive folders have swelled in recent years as a generation of Americans has done stints as clothing-store clerks. According to the U.S. Bureau of Labor Statistics, annual nonsupervisory employment in clothing and clothing-accessory stores grew to nearly 1.3 million workers in 2007, up nearly 20% from 1990. Gap Inc. says it has trained "hundreds of thousands" of Gap store employees in the art of folding since the late 1980s.

Along the way, legions of retail grads have spent countless hours neatly folding T-shirts and jeans and stacking them on tables and shelves. Now, their peculiar idea of perfection is straining marriages and leading to bizarre behavior ranging from buying clothes based on an item's foldability to straightening up sloppy displays while shopping.

Wal-Mart remains the No. 1 retailer by revenues — a position it isn’t likely to cede any time soon as it alone accounts for 21.7 percent of aggregate Top 100 sales. Change is afoot, however, as CVS has vaulted into the No. 3 spot as a result of its acquisition of Caremark, reflecting the evolution of the health and wellness industry as served by drug stores. Home Depot managed to hold on to the No. 2 spot despite the depressed state of the housing market, while Kroger, the supermarket leader, slipped one place to No. 4. Mass merchants are well represented in the Top 10, with warehouse club operator Costco Wholesale ranking fifth, Target sixth and Sears Holdings — parent of Sears, Kmart and several chains of hardware and home furnishings stores — in the eighth position. No. 7 Walgreen has been displaced as the volume leader among drug store companies, though it has been beefing up via acquisitions. Rounding out the Top 10 is SUPERVALU, which this year has its wholesale and distribution business included in total revenues.

While multi-channel consumers spend nearly twice as much as their single channel counterparts on average, they are also more likely to purchase from multiple providers, according to a new study from Opinion Research Corporation, an infoUSA company (NASDAQ:IUSA). Consumers who use more than a single channel to interact with an organization – for example, shopping online as well as in a company’s store – also tend to spend more than those who rely on only one channel.

“Multi-channel retailing is growing at a rate of approximately 30% a year in transaction value,” said Jill Glathar, Ph.D., Vice President and Director of the Market Planning and Development Practice at Opinion Research Corporation US. “Multi-channel customers are often the most astute about pricing, and as such, may not be the most loyal. Successfully implementing a multi-channel strategy to retain them requires an understanding of the behavior and attitude of this savvier type of customer.” This means that companies may now have to do more to keep such consumers, which can add additional costs in marketing and/or customer service. The research also indicated that internet shopping will continue to grow, with 65% of respondents expecting to make a web-based purchase in the future, vs. 42% who use this channel now. This suggests that the internet will continue its transition from a research or browsing tool to more of an actual selling channel. Somewhat surprisingly, telephone shopping will also continue to rise, as 39% of respondents plan to use the telephone to make purchases in the future, compared to only 21% who currently do. Additionally, the survey found that consumer’s multi-channel usage varies by industry. For example, big box retailers such as Borders and Home Depot (17%); mass merchants such as Walmart and Target (16%); department stores (14%) and restaurants (11%) have had the most success at implementing multi-channel strategies. “The ability to successfully integrate direct and indirect channels in to a customer-centric multi-channel sales and service environment will really define the market leaders of tomorrow.” Dr. Glathar said.

Multiple Food retail and wholesale operators gathered at the recently conducted The FMI Show plus MARKETECHNICSand got to see the latest consumer product trends and explore strategies for satisfying customers and generating growth. For all of us who could not make it to the Show, FMI has released the presentation decks that were used. There are lot of good presentation on Retail Technology, few good presentations on how to reduce shrinkage, Data Security, Category Management among others. Something that will keep you occupied for few days atleast.

While Shop.Org had their Annual Summit in US, some of the top Indian Retailers & professionals gathered in Mumbai for India Retail Foru...

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The information in this weblog is provided "AS IS" with no warranties, and confers no rights. This weblog does not represent the thoughts, intentions, plans or strategies of my employer. It is solely my opinion. Inappropriate comments will be deleted at the authors discretion.